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Mental Health Awareness: How to fight financial anxiety
- By
- Murray Humphrey
With soaring energy prices and the cost of living skyrocketing, our finances are a major concern right now. In honour of Mental Health Awareness this month, we’ll be going through some tips and tricks to help you reduce your financial stress and anxiety.
Whether you’re employed or self-employed, use this guide to help you ease your money worries while taking care of your mental well-being. Let’s get started.
What is financial anxiety?
If you’re feeling anxious about money, you’re not alone. According to a Financial Capability survey, it’s estimated that 39% of adults in the UK lack confidence when it comes to managing money. Even worse, over 11.5 million people have less than £100 in savings.
Financial wellbeing is defined as feeling in control of your finances. It's about feeling secure about your financial future. Everyday activities can trigger financial anxiety, including the fear of looking at your bank statement or opening your household bills. If left unattended for too long, it can become overwhelming for your mental health, damage your self-esteem and cause difficulties in relationships.
A decline in mental health can make it harder to cope with financial issues, leading to a downward spiral.
How to reduce financial anxiety
If you have a predictable source of income, budgeting and planning ahead can help ensure money isn’t a constant worry for you. Review your finances regularly. Understanding how money is flowing in and out of your account is the first step to regaining control of your finances and improving your financial wellbeing. Make a list of all your current bills and outgoings. Note down all of your income sources. Tracking your finances will help you plan for upcoming expenses.
Once you have a better picture of where you stand, a budget can help you tackle your financial problems head-on. Note down any debt payments, monthly bills and living expenses. Next, look for ways you can cut down on non-essential items and free up extra cash that can help you tackle your financial burden.
Financial anxiety for the self-employed
If you’re self-employed, irregular income can be challenging for your mental health. In fact, only around a half of the UK's self-employed are happy with the state of their finances. While it can often feel like you're alone, without the support of a company or financial support from the government - there are a number of ways you can take things into your own hands.
Building an emergency fund can help prepare you for unexpected expenses. Set aside a portion of your income every month in a savings account. This can be used to cover expenses during periods where your income may fall short.
It can also help to educate yourself on financial policies, tax and what support is available - you can check out our extensive guides to self-employed pensions here.
It's also important to plan for the future as contributions to your pension fall entirely on you. Use a pension calculator to get an idea of how much you might need to save each month. No amount is too little to get started.
Tracking your outgoings over 30 days can give you a clearer picture of where you stand.
Help for those struggling
Getting help is not a sign of weakness. It can be the first step in addressing your financial concerns and taking action. Below are a few resources for those struggling with their financial wellbeing and looking for somewhere to turn.
Learn more about how Penfold can help you on your financial journey today.
Murray Humphrey
Penfold